Survey shows: Fewer companies want to raise prices - and some even lower them
Created: 2023-01-11Updated: 2023-01-11 13:18
By: Fabian Pieper
The price spiral should turn upwards much more slowly this year - but not for groceries.
© Hendrik Schmidt/dpa
The number of companies that want to raise their prices will drop in 2023, according to a survey.
But in some areas, prices continue to rise.
Munich – The most obvious consequence of the Russian war of aggression in Ukraine is the energy crisis in Europe and the associated inflation.
In almost all areas of life, prices have skyrocketed in 2022 - or manufacturers are relying on brazen deceptive packaging.
And in 2023, the price spiral should continue to turn upwards - albeit noticeably slower.
Nevertheless, in some areas consumers have to be prepared for further price increases.
This is the result of a survey by the Munich Institute for Economic Research (Ifo).
The institute had asked thousands of companies about their plans for the current year 2023.
The result: fewer companies than there have been for more than a year want to raise their prices this year.
The number of companies planning price increases is therefore lower than it has been since October 2021, the Ifo announced on Wednesday.
Inflation: The economy as a whole wants to increase prices less frequently
To make this clear, the Ifo uses a point system.
It indicates what percentage of companies want to increase their prices on balance.
If all companies were to increase their prices, the value would be 100. If all companies were to lower their prices, it would be minus 100. The amount of the planned increase is irrelevant.
The percentage of those who want to lower their prices is subtracted from the percentage of those who want to raise them.
In November 2022, the value for the overall economy was still 46.2.
Now he dropped to 40.3 points.
The construction and manufacturing industries contributed most to this decline.
There, the price expectations fell from 38.4 to 28.3 and from 53.5 to 42.0 points.
Despite a significant decline: Food retailers are the most likely to plan price increases
In retail, the Ifo recorded a drop from 50.6 to 42.0 points.
And fewer companies also want to increase their prices for service providers.
There the value fell from 41.1 to 38.1 points.
As a result, the rise in producer and consumer prices should gradually slow down in the coming months, predicts Timo Wollmershäuser, head of Ifo economic forecasts.
However, he adds: "However, inflation rates will remain high." He explained to
tagesschau.de
that 50 percent of companies are not planning any price increases, five percent even want to lower prices again.
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This is also illustrated by the forecasts for other sectors such as food retail.
There, too, the Ifo expects a sharp decline, but the value, which fell from 94.7 to 83.7 points, is still at a high level.
Drugstores (91.4 to 72.0) and the toy trade (94.5 to 77.0) recorded strong declines.
Inflation rate is falling – and should normalize again next year
Companies from areas such as gastronomy want to raise their prices much more frequently.
There the value rose from 57.1 in November to 63.4 now.
The same applies to clothing retail (32.4 to 52.9) and home textiles and carpets (48.2 to 70.6).
Price reductions should only be expected in the paper industry.
There the value fell from minus 10.8 to minus 28.1 points.
Most frequent price increases per trade on balance
Manufacturing industry:
Manufacture of clothing (77.2 percent)
Beverage production (60.4 percent)
Data processing devices (58.1 percent)
Retail trade:
Food and Beverage (83.7 percent)
Consumer electronics (80.0 percent)
Toys (77.0 percent)
Service Sector:
Gastronomy (63.4 percent)
Travel agencies and tour operators (56.0 percent)
Rental of movable property (54.2 percent)
The inflation rate therefore remains high.
In 2022 it was 7.9 percent in Germany – a historic high.
Due to the electricity and gas price brake, Ifo experts expect an inflation rate of 6.4 percent in the current year 2023.
Other experts also estimate the price increases to be expected this year at between five and seven percent.
Inflation is not expected to return to pre-war levels until 2024.
